A 2007 investigation by Homeland Security agents led them to conclude that a Texas company was raking in as much as $2.5 million per year through the importing and reselling of mod chips obtained from a supplier in China, GamePolitics has learned.

When installed in video game consoles, mod chips allow for the playing of pirated copies of games, but have other more legitimate uses as well. Although they are legal in some countries (Canada, Australia, UK), mod chips are prohibited in the United States under terms of the Digital Millenium Copyright Act.

To date, federal law enforcement officials have kept a tight lid on "Operation Tangled Web," their code name for a wide-ranging investigation into mod chip distribution in the United States which culminated in a series of raids in August, 2007. However, a detailed search of publicly-accessible court records by GamePolitics has turned up signed copies of warrants authorizing investigators from U.S. Immigration and Customs Enforcement to seize two accounts controlled by a Texas man, identified by investigators as Manuel S. Diaz-Marta of Dallas. The warrants were sworn to by ICE Agent Vaughn Johnson, an asset seizure specialist.

GamePolitics readers may recall that on August 1, 2007, ICE agents raided 32 locations in 16 states, seeking evidence of mod chip distribution. Federal agents received technical assistance in the case from video game publishers trade group the Entertainment Software Association.

According to the documents obtained by GamePolitics, the investigation into Diaz-Marta began in November, 2006 when ICE Agent William Engel of the agency's Cleveland Field Office made undercover purchases of PlayStation 2 mod chips from www.modchipstore.com. An ICE check of domain registration records showed that the URL was registered to a Dallas company, NonStop Technologies. Feds then traced a money order used to make their undercover purchase and found that it had been deposited into a Wells Fargo Bank account registered to NonStop Technologies and Diaz-Marta. ICE alleges that Diaz-Marta listed his gross annual sales as $1,800,000 on Wells Fargo account application forms. When investigators seized the Wells Fargo account on August 1, 2007 it contained $109,100.55.

ICE also alleges that, between August, 2006 and February, 2007, the Wells Fargo account was used to make forty wire transfers totalling more than $500,000 to Supreme Factory, a Chinese company which federal investigators say is known to them as a distributor of mod chips. During the same time period, more than $1.2 million was deposited into the Wells Fargo account, presumably from mod chip sales within the United States. At that rate, federal investigators calculated that modchipstore.com would have been generating roughly $2.5 million per year in sales.

During the August 1, 2007 raid, investigators searched Diaz-Marta's residence, according to one of the affidavits signed by Agent Johnson. At that time agents discovered more than 100 mod chips as well as invoices from Supreme Factory for additional devices. Agent Johnson estimated that 80% of NonStop Technologies' business derived from mod chip sales, writing in a seizure affidavit:

The business cycle for NonStop Technologies more closely resembles that of a drug dealer than that of a provider of legitimate consumer goods. The sales volume and turnover being conducted by NonStop Technologies is indicative of the sale of a highly sought after and scarce product...

As a result of the search of Diaz-Marta's residence, agents also moved to seize a Scottrade account. No funds were contained in that account, however.

GP: Today's GamePolitics exclusive coverage is the first public indication that 2007's Operation Tangled Web was a major investigative success for the feds, as well as something of a coup for the ESA's anti-piracy team. Heretofore, the only publicly available information on the case has consisted of scattered, largely unofficial reports concerning apparent small-fry who were caught up in the sweep. Now, with evidence of NonStop Technologies' impressive revenue stream and large wire transfers to China, the picture of the investigation has changed considerably.

It is important to point out, however, that no information has been released by the U.S. Attorney's Office regarding potential indictments of anyone involved in the case, including Diaz-Marta. ICE declined GP's request to comment for this story. We should also point out that 31 other places were raided on August 1, 2007. Very little is known so far about what was found at most of those locations.

You know what else conveys frustration when dealing with absolute stupidity? Words. Not this emo-action in my text garbage. We are one step away from people hugging and snuggling and crap in these responses, and I for one won't let it get that far.

I will respectfully disagree with you there. I don't find it as such, but you are perfectly fine believing that. Your beliefs indeed...just I ask don't call everyone emo for doing something you don't like. Thank you!

....what?? This looks a hell of a lot like an argument to me. How the crap does that look close to 'hugging and cuddling?'

Your use of the word emo is completely ass-backwards. If you keep attacking people here for the use of a widely-known internet meme, you seriously just don't belong here at all, and it wouldn't surprise me if somewhere in the next few weeks or so, you'd be slammed with the banhammer for never being on-topic.

Facepalming is BODY-LANGUAGE, for God's sake. It's supposed to be HUMOROUS. You're on the internet. Can you let people make a freaking JOKE once in a while?

The argument isn't over the fact that it is used often, but rather over the fact that someone is publicly displaying it in a negative light and acting on reactions, such as people other than myself appearing on Derovius' Emo List along with Dave, Father, BrokenScope, and some other person but I can't remember the name.

Odd. This is how long after the search and siezure and this news suddenly pops up out of the blue. Admittedly they had to have something to point at to show that they had proper cause for the mass "net", instead of harrashing oh say normal US citizens.

There are a few flaws though.

1) They point at how much was in the account but not at expendages, possibly saving etc.

2) They are estimating for a year. Um guys ever hear the joke; "An elephant is a mouse built to Goverment specifications"? ie goverment tends to blow things out of proportion and remember $300 wrenchs and other things that our beloved goverment tossed money away on.

3) No idea how much this mass net cost tax payers (you can bet their "allies" in the ESA and game makes (cough EA, cough) did not pay for this). But I would be willing to bet to cost far more then the 2.5 million they "protected" for our ecomony.

4) Since they cannot go over the Chinese company then they need to slap the hand of someone.

Have a better idea. How about tracking these chips and taxing them? Would be willing to give odds that the goverment knows they cannot stop them all anymore than they are drugs. Are they are threat to our society? No? So why not go the other way and make money to help our ecomony instead of trying to play "smack the mole". Oh wait of course the DMCA.. idiots. Costing more then it is protecting and biting the hand that feeds.

Kind of curious though what happened to the Freedom of Information Act? (This was a national group that did this sting/net as I understand it). It was set into law for specifically this purpose. In ensure information with which to attempt to prevent political corruption and abuse of power. Not sure why it is still hidden (shoved under the carpet) as this is not exactly a matter of National Security.

Well, good. It IS an illegal chip and while I wouldn't care if they were chips to let you play a game you legally imported from another country but... mod chips to play pirated games?

Despite whatever excuse it may be, this is some victory for both the consumer and the company. After all, with less illegal stuff like this... maybe there will be less things like DRM that're enforced down our throats(despite the fact that they don't work anyway!)

Banning modchips is much like if wal-mart got it legislated that baking bread with yeast in X (sony, nintendo, microsoft) ovens was illegal unless that yeast and any yeast products had a wal-mart seal of approval on it.

While that obviously affects bread, yeast is also used in the brewing of beer and other alcohol(open source). (Homebrew) Alcohol is used in making vinegar(Game mods), and vinegar in all sorts of things. and suddenly wal-mart has a major chokehold on all culinary activities.

So what if wal-mart decides it doesn't like grandpa's old time beer, who has had to pay wal-mart enormous amounts of money and hike the cost of his beer (games cost 60+ dollars a pop now-a-days) to get ahold of his yeast?

Well, the answer is: grandpa's goin' out of business.

The ONLY reason these laws passed was a huge amount of ignorance on our politicians part, and the vast majority of people not realizing the ramifications.

Right now there are some people that use modchips for piracy. I always wanted to get one so I could make a copy of my games and archive them in the closet. I do so on my computer.

The fact of the matter is these laws are seriously damaging the U.S.A.'s technological standing.

People screw up, even politicians. The difference is other people fix their mistakes, politicians have to be beaten with legislation.

The answer to that is millions spent by these organisations lobbying politicians to make these devices illegal. This isn't something that was identified as a threat, as such, it was something that companies considered may impinge on their profit margins by some small degree if used unscrupulously by certain individuals.

There are certainly those who perform illegal acts with Mod-chips, there are also those who certainly perform illegal acts with knives/guns etc, but just like 'Guns don't kill people', Mod-chips don't download illegal games, it's people that do that.

Mod chip manufacturers don't have a lobbyist and millions to spend on filling the warchests of elected officials in DC. Gun manufacturers have more than one lobbyist and plenty of millions. Hence the disparity in the laws.

How are you so sure that people are using mod chips for legal purposes? Are you trying to take a completely objective view of the legallity of mod chips? They "can" be used for homebrew. The "can" be used to make back-ups of legally owned games. They "can" be used for so-and-so legal purpose. The real question is, are they being used that way?

Why not sell a mod chip that does not allow copyright protection to be circumvented? Do you think a mod chip that ONLY allowed hombrew and region-free play would sell?

I "can" use a DvD to store files. I "can" use a DvD to store movies and songs that aren't protected by copyright laws. I "can" store a big database on it, or a game that you're allowed to non-commercially spread the installation files from. (Like, say, Ragnarok Online.)

How sure are you people actually do that? Should we outlaw all writable disks because they potentially can be used for illegal activity? Storing illegally downloaded movies and songs, making isos to run downloaded games from, it's all possible. But there's plenty of legal activity possible. Should we outlaw them nevertheless?

"Well, good. It IS an illegal chip and while I wouldn't care if they were chips to let you play a game you legally imported from another country but... mod chips to play pirated games?"

No, the chip is illegal because they lobbied to make it illegal. What it does is overcomes regional encoding, as well as copyright measures, opening the system up for the user do as they please with it.

By comparison, say you purchase a diesel vehicle from Ford, and 6 months later you install a turbocharger to get better fuel economy of it. But Ford now says "no no, less strain on the engine means we make less money in parts. Lets make it illegal to modify our vehicles." A week after installing said turbocharger, Ford kicks in your front door and drags you away for "altering" your vehicle. You legally purchased this vehicle, you legally purchased this upgrade/modification and legally you installed it yourself/paid someone to do.

The entire reason you are arrested is because you prevented them from milking every ounce of $$$ out of you.

Moreover, mod'ed systems can run O/S that makes it possible to play DOS games on the console through a Linux interface (re: Homebrew). There is no theft going on, Linux is free to use and you have to find your own DOS games to put into it. But its still illegal. Does that make sense to you?

"Despite whatever excuse it may be, this is some victory for both the consumer and the company. After all, with less illegal stuff like this... maybe there will be less things like DRM that're enforced down our throats(despite the fact that they don't work anyway!)"

Heh, not likely. Games and DVDs will be regionally restricted now and forever, so long as nonsense like this goes on. If you go to Europe or Japan, and buy some media, it won't work on your home system. Period. What the above mod chips do is let you play your games/movies on the system. Your games, which you bought with your $$$. Seems a little stupid that you have to buy a Japanese system to play Japanese games/movies.

In your view, is it in anyway possible to have a bad law? A law that was ill-conceived and/or incorrectly and unfairly enforced? If so, is the person who is affected by such a law wrong to express his or her dissatisfaction with it?

Certainly, if a person breaks a bad law, they should not be surprised when they are caught and have to suffer the consequences. However, that doesn't mean they or anyone else should be happy about it.

I think the laws that make this sort of thing illegal are absurd. I understand that piracy needs to be illegal, but modchips simply do *not* force anyone to pirate... they have a thousand and one legitimate uses *other* than piracy. I had a mod chip installed on my original XBox so that it could play videos and music (which I owned) from a networked computer on my fancy new HDTV. According to law in question, this is illegal. Can you give us a good reason why this should be illegal?

By selling me the modchip, the seller did not force me to pirate games. Sure, I *could* have used the mod chip to pirate games, but I *didn't.* I *could* take my car and start running over pedestrians, but I *don't*, and the person who sold me the car shouldn't be fined or sent to prison just because he sold me something I *could* do bad things with. If there was a law that would make the selling of the car illegal, sure, he would have to choose to either follow it or break it...but that doesn't make the law any less retarded.

Out of context? Let's look at a direct quote: "For the record, I don't import my games but I know people who do. I couldn't afford such a thing being a mother making money for my nephew/son and helping my own mother stay in the house we live in. "

Irrelevant to the argument.

"However you may promote it... illegal activity is illegal activity and the ones who speak out about it the most are most likely the ones who're doing the act."

Ad hominem attack. No evidence.

"That's the law. You either follow it or you break it. You choose to break it, that's your own fault if you get arrested. You seem to promote illegal activity. Kudos to you...That's my view, however, and I doubt it'll be changing any time soon."

So unless that "kudos to you" is meant in a completely unsarcastic way, you are doing nothing other than saying, "It's the law; if you don't like it, rot in jail." Glad to see that blind obedience is still alive and well. There is no dissent! There is no dissent! Oceania has always been at war with Eurasia!

If you want to say you are revising your statement because it doesn't fully reflect the breadth of your opinion, fine. But don't get up on this "out of context" high horse. In the full text of the post I quoted you made ZERO allowance for civil disobedience or for unjust laws.

I was thinking more along the lines of Nazi Germany and massacring millions of innocent people, but the above works as well. People who do not question the validity of the rules they adhere to deserve what they get.

That out of the way... I'll be the first to say that there are some that don't make sense. Despite not making sense, it's still illegal. Even if we don't like it, I believe that it should be followed until someone can find a technicality, or prove it to be unconstitutional, etc...

But until then, follow it and don't let it ruin your life. That's all I'm saying. It's stupid to hate a law and then break it because you don't like it(Thus, not following it for you don't like that law).

Now I am not trying to say that modding your console is on the smae level of segregation, but I have to ask this:

Do you think that segregation would have ended if noone disobeyed those laws? Do you think they should have just dealt with the laws until some kind and caring white man decided it was time to let the black people be equal with the white people?

The reason civil disobedience (however it is still illegal to disobey a law) actual works to over turn laws is that the courts get flooded with cases of the same crime on a regular basis. This gets people's attention and they begin to dig to the underlying issue and not just the individual cases.

If enough people were to buy mod chips and only play games they either bought or made themselves or otherwise obtained legally, then we could start to get people's attention that such things are not the tool of the devil, aka pirates. Get enough false positives and the government could change their mind about them.

That could take a long time for such a change, maybe even impossible. Being that mod chips aren't exactly as important as gay marriage, abortion, and other matters... it could be a long time before something serious could happen. If anything, I think those issues should be solved first before something like a mod chip should even be considered in court.

Some people are taking my words out of context now. To me, the whole issue with segregation, the holocaust, and other bigger, more important issues are a whole different field then mod chips on a computer system. To shoot down the beliefs here(and to not respond to every attacker who're now taking my words out of context), I don't believe in segregation. The holocaust was real, horrible, and should have never happened. We were right to rise up back in the days of the Revolutionary War but were wrong to slaughter American Natives in the name of Christianity or other things.

But, to compare a mod chip to segregation? I'm sorry, EZK, but with due respect... I couldn't compare the two while they might have similiarities, their value of importance is, well... I don't see it.

I'd rather see gay marriage legalized and for people to stop making abortion illegal before anything on a mod chip.

To prevent more of my words being taken out of context and having my original message being butchered more, I'm not going to debate further on this.

I wasn't trying to make mod chipping to be some huge civil rights issue. I was simply taking a prominent example of civil disobedience bringing about real change.

I too don't think this is a big enough issue to have massive protests in from of the Big 3's US head quarters, but it is something that doesn't make any sense. There are not any laws preventing me from altering my television to function with both NTSC and PAL broadcasts. Why should I not be able to alter my console to play both NTSC and PAL games?

That is what I am getting at. Why are game consoles treated differently than other electronics when it comes to modding?

One theory could be that, from what I remember correctly... I THINK I heard of something how someone was/could be able to mod their gaming system to control an airplane, even make it into bombs. It could be that the reason it's so heavily looked into because they were center in the terrorism debate years ago. I remember this but it's vague so do correct me if I'm wrong.

That's probably why. And you know the current administration. If it's linked to terrorism, expect a witch hunt from the government.

Edit: And I was more annoyed at the others trying to demonize as this person who likes segregation and doesn't wish to challenge things. At least, thats how I felt, anyway... which is an insult since I was raised to believe in equality and saw first hand how it feels to be segregated... when the "special kids" weren't allowed to attend classes with the others.

I doubt that was the reasoning behind this vilification of mod chips though. The mod chip laws are the solely the domain of the DMCA and related laws. They do not fall under any anti-terrorism laws that I know of.

It does but I remember a report of some kind being said years ago... it's vague though, being so long ago.

I can try to find it but I doubt it, being so long ago. It wouldn't matter if it fell into the anti terrorism laws or not... The current administration is very paranoid about it, or that's what I've gathered in their tactics against it. I remember I couldn't carry shampoo home from a trip to California because some jerk wanted to make a bomb from the chemicals of something. So any liquids, I had to throw out.

You must be thinking of laws regarding portable electronics on flights.

No I don't think there are any laws about electronics on flights. You just have to let them scan it as you go through customs. You can still bring your PSP, DS, or Laptop on a flight. You just have to turn off the WiFi.

I think I do remember some old guys at DHS making such claims now. That is their job to think of new ways terrorists could kill us, so that the terrorists don't have to expend any resourses into R and D.

No, you have to power off all electronic devices, not just those that actively transmit into the EMR band. Interference is interference in the eyes of the planes avionics, wifi may or may not produce a pronounced effect, but I for one dont want to die trying.

That being said, its quite laughable that people are afraid of consoles being used to "take control" of airplanes like they are some sort of remote control car. The bomb issue is also quite amusing, and equally foolish, as extremists will use anything they can fill with explosive compounds AND take with them on a flight.

This may sound especially harsh, but why are people so stupid? I hear someone say that terrorists can maybe cellphones into bombs and I snicker. Perhaps being an engineer allows you to realize just how inventive people can be when they want to be. Its taken the whole, "OMG" out of these stories.

The guy wasn't carrying electronics on a plane, he was selling them. Besides TSA and ICE have completely different spheres of influence.

ICE is involved because it was imported goods. Again, if it was terrorism related it'd be DHS and FBI, not ICE, and we'd be getting the Feds crowing about their big bust in a televised press conference.

"That could take a long time for such a change, maybe even impossible. Being that mod chips aren't exactly as important as gay marriage, abortion, and other matters... it could be a long time before something serious could happen. If anything, I think those issues should be solved first before something like a mod chip should even be considered in court."

And why should any of the above be important? Because they are social issues or because the people involved whine so loud that the other topics of discussion get drowned out? Maybe we should all claim gaming as a religion and milk some rights out of the government.

"Some people are taking my words out of context now. To me, the whole issue with segregation, the holocaust, and other bigger, more important issues are a whole different field then mod chips on a computer system. To shoot down the beliefs here(and to not respond to every attacker who're now taking my words out of context), I don't believe in segregation. The holocaust was real, horrible, and should have never happened. We were right to rise up back in the days of the Revolutionary War but were wrong to slaughter American Natives in the name of Christianity or other things."

So what would make this real and horrible in your eyes? Do the police have to murder the modchippers? or only drive them into financial ruin so they live on the street? Authoritarianism is authoritarianism, be it big/small scaled, focused/broad scoped, foreign/domestic.

"I'd rather see gay marriage legalized and for people to stop making abortion illegal before anything on a mod chip."

You'd rather? So this is about you then? Try thinking about more than just yourself, try thinking about the community. I don't even own a goddamn game console to mod, but here I am kicking and spitting for their right to mod it.

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Sora-Chan: Con't. Games like AC are a pain to someone like me who likes to play games in order. So when a game gets too many releases too quickly, it puts me off. Only exceptions are games that have no interconnected underlying stories like the FF games.03/31/2015 - 2:53pm

Sora-Chan: Wikipedia has rarely let me down on matters like this. But yeah... AC needs a break.. like two.. or three... or eight years.03/31/2015 - 2:51pm

Conster: There's 9 already?! I think I played 1, 2, and the ones inbetween 2 and 3.03/31/2015 - 2:23pm

Sora-Chan: Con't There are now Nine... of just the main entries into the series. There are 13 more in the "other games" department.03/31/2015 - 2:15pm

Sora-Chan: I tried to get into AC. Was having a decent time with the first one, at which point they had already released three titles. Then a fourth came out... then a fifth... the wall kept growing before I could finish the first.03/31/2015 - 2:14pm

Daniel Lewis: I think ubisoft should give AC a break before it's milked to death,and i'm a big fan of the games03/31/2015 - 1:15pm

Daniel Lewis: The only thing said i disagree with is the final quote on Men's experiences are seen to be universal but women are gendered,though doesn't anita say that games with male protagonists are male power fantasies,so in turn both are gendered03/31/2015 - 1:08pm

Daniel Lewis: i found the video to be much better than any of the TvW series and it's about time the positive women are put in the spotlight03/31/2015 - 1:06pm

Daniel Lewis: So feministfrequency released a positive female character video https://www.youtube.com/watch?v=gXmj2yJNUmQ03/31/2015 - 1:05pm

Daniel Lewis: I think the guy who made the direct leak said it was an april fools joke when a real one was announced03/31/2015 - 12:43pm

MaskedPixelante: No way Nintendo would let information like that get out. Remember, they shut down a memoir about the localization of Earthbound by enforcing a 20 year old NDA on the author.03/31/2015 - 12:42pm

james_fudge: Conster: the larger issue is that Ind. does not protect LGBTQ+ people under state law03/31/2015 - 12:11pm

PHX Corp: @MP I think it is confirmed(not an April Fools joke) http://mynintendonews.com/2015/03/31/nintendo-direct-confirmed-for-wednesday-april-1st/03/31/2015 - 12:00pm

Conster: Apparently Pence intends to amend SB101 so denying service isn't allowed - without explicitly protecting LGBT+ and while still allowing the many other things you can get away with now if it's motivated by your religious beliefs.03/31/2015 - 11:53am

MaskedPixelante: http://mynintendonews.com/2015/03/30/rumour-nintendo-direct-on-april-1st/ A supposed full leak of tomorrow's Nintendo Direct, so you can all laugh and laugh about how wrong it is.03/31/2015 - 11:35am

PHX Corp: http://kotaku.com/why-a-tekken-7-character-is-being-called-a-phoney-1694724959 Why a Tekken 7 Character Is Being Called a Phoney03/31/2015 - 10:08am

Michael Chandra: Argh. Anyway, I'm glad that move was made. Wonder if it counts, can he just declare it like that? 03/31/2015 - 9:27am

Zen: Conster - Good, it's a BS law that exists to just allow hate basically. Glad people are standing up to it. Sadly it should never have passed to begin with though.03/31/2015 - 8:39am